82 PART TWO: LIBRARY DELIVERY SERVICE MODELS library orga nization. Without this clause, it may be possible for the carrier to claim that it has an employee-employer relationship with the library orga nization, which implies greater responsibility and liability on the part of the library orga nization. This provides protection in addition to the indemnity clause, specifying that the carrier is responsible for its own actions and that the library has no control or direction over the carrier’s decisions made to perform its business. Severability and survivability. A court may find one or more parts of the contract not enforceable due to a conflict with laws. In such a situation, a library orga nization should protect the rest of the agreement and business relationship with a severability clause. This allows portions of the contract to be severed from the agreement while the remainder of the contract is still enforceable. In addition, parties may wish to make parts of the agreement binding after the term of the agreement ends. This situation may arise with regard to unresolved damages between parties or when certain paperwork should be kept for legal purposes after the contract term. Anti-waiver. If a portion of the contract has been breached and has gone unenforced for a time, and new behavior has been established by the parties, then the damaged party that has accepted the new behavior cannot force the other party to rectify the damage. If, for example, a library consistently pays late for ser vices, and the carrier has not charged late fees, the carrier cannot suddenly change its behavior and charge late fees for previous payments or force the library to start paying late fees, because a new contract or behavior has been implied by the actions of the parties. An anti-waiver clause is provided in contracts to prevent the past behavior of parties from overriding the contract. With an anti-waiver clause, in the case of late payment by a library, the carrier could start charging late fees to the library even if such charges have not previously been enforced. Written modification. After the contract has been signed, verbal modifications to the agreement may be made and enforced, unless a section in the contract limits modifications to be acceptable only through a written modification. Specifying that modifications to the contract must be in writing ensures that no confusion exists between the parties about the terms of the agreement. Notices. Usually, courts do not recognize verbal or copied notices as binding to the parties of a written agreement. Parties may, however, agree in CONTRACTUAL VENDOR RELATIONS 83 their contract that changes or notices may be accepted via facsimile or electronically to make communication easier between the parties. Time is of the essence. Time may not be a business-critical factor in the performance of a contract. In other words, if a supplier makes goods and ships them to a buyer a few days after the planned delivery date, if the buyer is not held up by such a delay, no damages would result from the delay. But in the business of transporting goods a delay may result in a patron using an alternative information source, such as a commercial book dealer or information provider. To some libraries, this may or may not mean a loss of business. Therefore, it may make sense for some orga- nizations to state that “time is of the essence” in the performance of the contract to recover losses due to the delay. Force majeure. Force majeure is a contract section that states that neither party is responsible for loss or nonperformance resulting from events outside the reasonable control of either party. Such events are frequently referred to as “acts of God,” such as war, catastrophic weather, or a worker strike. Captions. Captions are usually present in well-written contracts to help a reader more easily identify sections of a contract. However, if not otherwise specified, a caption may be interpreted to change the meaning of a contract. Therefore, it is appropriate for a clause to state that captions are included for the benefit of legibility and are not intended to affect the meaning of the contract. Transportation-Specific Contract Language All elements of the preceding list are common in contracts related to transporta- tion and other business relationships. Because transportation of goods has his- torically been heavily regulated, additional language should be added to contracts that relate to the transportation laws. This section focuses on the legal issues per- taining to transportation. Bill of Lading A bill of lading (also called a waybill) is a legal document that describes the con- tents and date of a shipment and may include writing that describes terms and conditions of acceptance of a delivery. Either carriers or library orga nizations may supply the bill of lading. Usually, the receiver of a shipment must sign the bill 84 PART TWO: LIBRARY DELIVERY SERVICE MODELS of lading to indicate that the items delivered are in good condition, that no pieces are missing, the date received, and that the carrier is released from any further liability from the shipment. The terms of a bill of lading are legally binding when the receiver signs for a delivery, even if the library orga nization has not read the terms on it. In some cases, though, writing on the bill of lading may conflict with the terms of the contract, in which case it is important to include language in the contract that specifies that the terms of the contract supersede those on the bill of lading. Insurance Limits Requiring insurance in a contract ensures two things for the library: that, if faced with the expenses of a serious accident or a high-dollar lawsuit, the carrier will be able to continue its ser vices without going bankrupt due to these expenses; and that, if a lawsuit is brought against the carrier, the carrier has enough insur- ance to cover the expenses of a lawsuit against it and can help prevent the library orga nization from being sued by the injured party. Transportation contracts should include a section that states how much insurance the carrier must carry in the areas of general liability, cargo liability per incident and per year, and umbrella insurance. Contracts should also require carriers to hold the state minimum requirement for worker’s compensation insurance. An institution should require carriers to list the institution as additionally insured, to ensure that a loss against the institution is paid directly from the insurance company to the institution. General liability insurance protects against claims from a wide variety of factors, such as general operations, sale of goods, and ownership of property. In transportation, general liability insurance is especially important in covering expenses caused by major accidents and injuries. A practical rule is to make sure that, if the contracted carrier is sued for a serious accident, the liability coverage is enough to cover a reasonable claim against the carrier. If the carrier lacks ade- quate liability insurance, liability for such a major incident could fall on the con- tracting library orga nization in a lawsuit. Insurance is, however, generally meant to manage risk and cannot foresee all frivolous lawsuits. An institution should not require a carrier to overinsure itself or it may risk increased prices or a carrier that can no longer afford to do business with the institution. Because of the potential for loss or damage, contracts should require carriers to hold cargo insurance for the maximum reasonable value of shipments. Umbrella insurance is like “last resort” insurance, useful in the unfortunate event that a carrier has multiple large insurance claims in a year and its general CONTRACTUAL VENDOR RELATIONS 85 liability coverage is expended. Most carriers do not have to tap into their umbrella insurance, but those that do can sometimes prevent bankruptcy by having the additional insurance at their disposal. If a library orga nization is contracting with a carrier to haul very large volumes of freight and is therefore exposed to a high risk of damage or losses that can occur on the road, it may be in the library’s interest to require a certain amount of umbrella liability coverage. Transportation Rates and Accessorials One of the most critical components of a transportation contract is the definition of costs for ser vices and the methods of modifying those costs. Before writing the prices to be paid in the contract, institutions should learn what rate structures and price increase processes their carriers follow. For example, some carriers wish to review pricing every year; others may wish to have flexibility in pricing if seri- ous market fluctuations affect their operations. It is appropriate for a carrier to request, and for a library to agree to, a method for a carrier to modify prices over the course of a long-term contract. It is also usually appropriate for an institution to require price changes in writing, so that verbal quotes over the phone are not considered final until both parties sign. Institutions and carriers also should agree on the terms of payment. Com- monly, carriers accept fifteen- or thirty-day payment terms; some offer a 1 percent or other discount if payment is received within ten days. In addition to the payment terms, institutions should agree with carriers on the consequences of late payment, including how many days past due is considered late payment. Institutions should make sure that their accounts payable processes are prepared to make payments as arranged in the contract to make sure late charges do not unexpectedly increase the costs of the ser vice. Although the primary charges for a carrier’s work can be described in a schedule of rates, many costs are unpredictable or are charged based on specific work performed by a driver. For example, some carriers charge a fee for help- ing unload a vehicle or having to unload a delivery in a difficult pickup place. Another performance-based expense is fuel cost. As unpredictable as fuel costs are, carriers cannot adequately recover these costs in their base rates. Therefore, most transport companies now charge a fuel surcharge in addition to their stan- dard rates. Fuel surcharges are usually based on a national, regional, or locally published index that states the average fuel price for the previous week or other period of time. They also assume that a carrier has calculated in its rates some base level of fuel expenses, so that the surcharge recovers only the excess amount of cost not included in base rates. 86 PART TWO: LIBRARY DELIVERY SERVICE MODELS All of these extra charges are called accessorial charges and may be negoti- ated with the carrier when setting the contract. Accessorial charges are usually written as addenda to a contract. Addenda can be useful to set off components of an agreement that may change from time to time. If standard shipping rates are expected to change over the course of the contract, it may be appropriate to reflect these in an addendum to the contract as well. Subcontracting Organizations Transportation companies come in two primary orga nizational structures: those that are asset owning (have trucks, drivers, and other transportation equipment), and those that work without transportation assets. Those without assets broker work between a shipper and a carrier or a group of carriers to perform the work required. Brokers are not usually directly liable for the work performed by an asset-owning subcontractor; asset-owning carriers are directly liable for the work performed with their own assets. Transportation laws define the relationships among brokers, carriers, and shippers in the event that contracts do not spell out a broker relationship. If a carrier under contract by a broker causes injury to the library or a third party, the broker may be liable for the injury due to the broker relationship with the car- rier. In many cases, though, the nature of the relationship between a broker and library orga nization must be clearly spelled out in a contract, so that the library is protected in the event of nonperformance by its broker’s carriers. When contracting with brokers, library orga nizations should make sure that the broker will contract with its carriers for all the substantial work and responsi- bility that carriers would hold if the library orga nization contracted directly with them. For example, if a library wants its carriers to have $1 million in liability insurance but is working with a broker, the library should contractually obligate the broker to make its carriers hold at least $1 million in liability insurance. If a library wants drivers to wear a specific uniform and be without facial tattoos, the library should contract with its broker to ensure that the broker’s carriers comply with this requirement. Part Three Managing Physical Delivery Services 89 7 Routing and Materials Management Systems Bruce Smith and Valerie Horton The success of routing materials through delivery whittles down to one word: cooperation. The best-designed material routing systems are those that promote accuracy, speed, safety, and efficiency for both the libraries using the delivery ser- vice and the delivery ser vice itself. This can be done only through the cooperative efforts of the delivery ser vice and its participating libraries. Library material routing through delivery is best studied as part of a com- plex supply chain. The simple way to view the resource-sharing supply chain is to break it down to its primary purpose, which is to take an item from the shelf of an owning library and send it to another library for patron use, and later to return the item to its shelf location at the owning library. As those who work with delivery know, the journey of an item from shelf to shelf and back is made up of many small steps. Many variables influence the effectiveness of routing and materials manage- ment systems, including integrated library system (ILS) or ILL system functionalities• facility space and design in terms of delivery materials processing areas • and delivery exchange access 90 PART THREE: MANAGING PHYSICAL DELIVERY SERVICES whether the delivery ser vice is provided in-house or is contracted with a • private courier whether an item is being shipped within a library system or consortium • or outside it whether the item is being shipped to the delivery system’s participants or • to others staffing• There are four main components to a materials routing management sys- tem: labeling, sorting, packaging, and handling. In this chapter we relate the basic components of delivery material routing to the path an item takes through the resource-sharing supply chain and how the different variables can affect routing effectiveness. LABELING How materials are labeled can be one of the most contentious debates during design of a routing management system, especially when materials are shipped outside a system managed in-house. Each library group within a delivery net- work has particular processes and ILS- or ILL-generated slips that it wants to use for delivery labeling to streamline its processing of materials. The bottom line is that a labeling system must work for the delivery provider to ensure speed and accuracy according to its internal routing and sorting structure. It is important that libraries sending materials adhere to standardized label- ing and codes as developed cooperatively between the libraries and the delivery ser vice. All information that is asked to be provided on an approved label must be included on the routing slip to facilitate its proper and timely delivery. Because materials may be shipped along multiple hubs when in transit through a delivery system, all hub locations must be indicated on a routing slip along with the final delivery destination. Other information that is helpful and important to successful material rout- ing is the shipping date and sending location, which are used to track routing problems. If an item is not labeled as it should be, knowing who sent it allows the delivery system to follow up with the sender to correct how the orga nization labels in the future. Having the shipping date allows participants of a delivery network to know the transit times for items coming from different locations. Should a library see that items take longer to arrive from a particular location than is expected, it can ask the delivery ser vice to work on improving the transit time. ROUTING AND MATERIALS MANAGEMENT SYSTEMS 91 Labels can either be handwritten or generated by the ILS/ILL system. Handwritten labels often lead to routing errors because of improper coding, not enough information, or poor handwriting. Handwritten labels also add a step to the process of preparing materials for delivery. The preference is that routing slips be electronically generated and printed. Printed labels are faster to create and tend to be more accurate and easier to read. In most ILL transactions, paperwork must be included with the item as it travels between a lender and a borrower for the item to be processed properly. With system-printed slips, it is possible to include the delivery routing infor- mation on this same slip. With a handwritten slip, the additional steps involved include having to refer to a delivery network listing to determine exactly how the routing slip should be filled out and then actually filling out the slip as neatly as possible. One pitfall on handwritten slips is that many communities can have several different libraries all using the community name. For example, in a city called Jefferson there could be a public library, a college, and a school district all receiving delivery. It is easy for a sender to just write Jefferson, which results in confused sorters handling the item in transit. In a closed-loop delivery system, where the libraries receiving delivery are a part of the same system and have delivery ser vice from one provider, it is possible to simplify labeling. In these systems labeling is generally needed only to ship hold or reserve material. Any items that are being returned to an owning loca- tion can be sorted according to item ownership labeling. To facilitate speed, it is best that any ownership tags on an item be placed on the front outside cover and conform to the coding system used by the delivery ser vice. How routing slips are labeled or coded is an important part of a successful material routing system. There are three main ways to do this: having the names of receiving locations and hubs fully written out, using alpha codes that corre- spond to these names, and using a numeric coding system. Fully writing out the receiving location names and hubs is self-explanatory. The benefit of spelled-out names over alpha coding is that shortened alpha codes can result in misreading. The disadvantages of full names, mainly with handwrit- ten labels, is the additional time consumed to prepare items for delivery and the possibility of important information being left off the routing slip. The best alpha codes are created in relation to the receiving location’s name. For example, a city named Monroe could be MON. Alpha codes with no rela- tion to the receiving locations names increase the difficulty of sorting and slow down sorting. An example is the OCLC codes, which for sorters are difficult to memorize and often require use of code guide sheets. Alpha coding is easier to [...]... the risk of lifting-related injury Plastic containers are an increasingly common alternative to canvas bags, especially in systems where delivery volume is increasing Plastic containers are the standard in supply chain operations in the private sector for transporting librarylike materials Plastic containers—also referred to as totes, bins, or baskets—are extremely durable, often lasting for decades... Handling Automated materials handling (AMH) has been in widespread use throughout many industries and businesses in the private sector for many years In the past ten years, AMH systems have increasingly made their way into the library, particularly in Europe The majority of these systems have been employed in automating the handling of materials being returned to libraries A well-designed system can... accomplished by standardizing the labeling practices, tracking delivery volume by delivery locations, and planning centralized sorting workflow to coordinate route return times with the sorter staffing 94 part THREE: managing physical delivery services Like many processes in the library material resource-sharing supply chain, the effectiveness of centralized manual sorting is measured by the rate at which... accurate sorting Expecting sorting staff at each sorting hub to memÂ� orize which libraries are served by which hub in the delivery network is not realistic This is especially the case when a private courier serÂ� vice is handling the sorting and the delivery, since this courier is likely not as familiar with the delivery network as a library-run delivery serÂ� vice Automated Materials Handling Automated... fifteen libraries set up for sorting on the other three rows of shelving With this new layout and sorting design, a new time study can be done to determine the sorting rate for materials to the five largest library sort locations and the rate for sorting to the remaining fifteen library sort locations A sorting rate increase would be the result of reducing the distance sorting staff walk when sorting items... the sorting system has a long-term negative cost impact The labor time in performing this function is an ongoing cost that grows over time as wages and volume increase The system must be designed with the capability for having manual induction points along the sorting belt added in the future to increase the number of operators who can feed materials into the system in order to process the delivery. .. materials filling hold requests and materials being returned to the library for reshelving In many libraries, hold materials for patron pickup are checked in at the circulation desk Materials being returned to an owning 96 part THREE: managing physical delivery services library to be shelved are often handled in a back workroom, where they can be checked in and then presorted onto book trucks for shelving If... sites considering AMH are usually most interested in the sorting functions In the first category, robotic crane or cart systems have been designed to convey totes at the central sort site Some of these systems move incoming totes to the sorting system location in the facility to eliminate any manual lifting of the totes This same system then takes totes that have been filled in the sorting process away... routing and materials management systems 99 items be inducted, or place, into the AMH sorting system in a manner that makes this possible This can involve manually placing an item with the bar code facing up on a sorting belt or designing the functionality into the AMH for the item to be manipulated by the system to rotate the item until the bar code can be accurately scanned Placing items manually into... how libraries can assist sorting efficiency at a centralized sorting location Now consider how a central sort site can separate materials being delivered to libraries to improve their handling efficiency at delivery Libraries, especially larger libraries, often process incoming delivery materials in different locations in the library according to where particular items need to end up The most basic separation, . materials being delivered to libraries to improve their handling efficiency at delivery. Libraries, especially larger libraries, often process incoming delivery materi- als in different locations in the. sorting solution. Centralized Manual Sorting Manual sorting requires coordination between libraries and the delivery ser vice, accomplished by standardizing the labeling practices, tracking delivery. which results in confused sorters handling the item in transit. In a closed-loop delivery system, where the libraries receiving delivery are a part of the same system and have delivery ser vice